Planned Giving

Retirement Plan Gift

Tax-deferred retirement plans such as Individual Retirement Accounts (IRAs), 401Ks, Keogh Plans, 403(b) plans, and profit-sharing plans and are excellent sources of retirement income. Unfortunately, these plans are not always a good choice for making gifts to loved ones. Income taxes on retirement plan benefits are deferred but not avoided. Thus, as assets are withdrawn during retirement, either by the owner of the account or a spouse, they are subject to income tax. As a result, retirement plan benefits left to children, grandchildren and other beneficiaries at the death of the account owner are subject to both income tax and estate tax, and the combination of taxes on the account can equal 60% or more of the plan benefits. If you do name a family member as beneficiary of retirement plan assets you may wish to name Claflin University as contingent or alternative beneficiary, should the family member predecease you. You can also give the family member an option to disclaim any benefits in favor of Claflin University.

Example 1:

Murray Smith accumulates $1 million in retirement plan assets. Upon his death at age 75, Mr. Murray leaves his retirement plan benefits to his three children. After income taxes and estate taxes, Mr. Murray’s three children will receive less than $360,000. Had the $1 million in retirement plan assets been donated to Claflin University, the entire amount would have been available to support University programs or to fund scholarships.

To make a gift or to request additional information about deferred charitable gift annuities, contact:

Sunya L. Young
Director of Planned Giving
Division of Institutional Advancement
400 Magnolia Street Orangeburg, SC 29115
Phone: (803)535-5704; Toll Free: (888)223-7103; Fax: (803)535-5371
E-mail: syoung@claflin.edu

The information provided on this website is for informational purposes only and is not intended as legal, tax or investment advice. Please consult your accountant, financial advisor or attorney to assist you in determining which planned giving option is most appropriate given your financial goals and objectives.